We are paying the price for panic

If the state of an economy is a true barometer of the health of economic governance in a country then the captains of ship India seem to have lost control on the rudder. The unfortunate paradox of the current situation is that with each attempt to tide over the choppy waters of inflation, the panicky captains of the Indian economy are pushing the ship further into a tailspin. In past 15 months, the Reserve Bank of India (RBI) has hysterically slapped 10 successive rate hikes on the banks with the hope that the jump in the banks’ lending rate by 400 basis points will tighten the flow of money and help bring inflation under control. Sadly, things have gone from bad to worse.

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